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Friday, 7 August 2015

NFP report preview

07 August 2015, 14:17
Today NFP report is to be published at 12:30 GMT from US.
What is NFP report?
  • NFP or non-farm payroll report is the monthly statistics on labor condition in the US released by US department of labor statistics. The report comprises goods, construction and manufacturing sector companies.
  • This report influences the financial markets deeply across asset class.
Key highlights -
  • Headline number for total hires last month was 223,000. July ADP employment number was weaker than expected at 185,000.
  • Today payrolls are expected at 225,000.
  • Second most vital component is wage growth, which is lagging, in spite of solid job gains for the past two years.
  • Labor force participation rate is showing no signs of rebound. It was at 62.6%, in last report. It has actually weakened.
  • Unemployment rate is expected to remain flat at 5.3%.
  • Average weekly hours were previous 34.5. No major change is expected.
Impact -
  • Volatility is sure to be on the card, post release.
  • Today's report is most crucial as better report would give rise to hike expectation from US Federal Reserve as early as September. US FED reserve looking for "some further improvement" in the labor market. Any number above 250,000 would be considered as very good.
  • Dollar index, which is value of dollar against basket of currencies is standing at crucial juncture. FXCM Dollar index is trading close to its range high of 12060. Dollar index is currently trading at 12034.
  • Any number below 200,000 would be considered as bad.